HELPFUL TIPS TO CONSIDER WHEN CHOOSING YOUR TAX PREPARER
IRS Expects More Taxpayers to Seek Professional Help This Year Due to the Most Sweeping Tax Reform Changes Made in More than 30 Years by the Tax Cuts and Jobs Act
Tax Preparer Fraud
In the past few years, the IRS has made significant improvements in its efforts to educate taxpayers. One of its focal points has been to warn taxpayers about tax scams. Unfortunately for taxpayers, one of the major scams the IRS has identified is tax preparer fraud. IRS advises taxpayers to know and look for the warning signs and understand the dangers of using these con artists
Known Benefits of Using a Professional Tax Preparer
With the passage of the Tax Cuts and Jobs Act, the most sweeping tax reform legislation in more than 30 years, our office is seeing more taxpayers choosing to use a paid professional to prepare their tax returns this year. With many tax professionals charging a few hundred dollars to prepare a tax return, it is often viewed as a dollar outlay that brings significant peace of mind to taxpayers knowing that their tax returns were prepared in accordance with IRS rules, and perhaps more importantly, that they have taken advantage of any available tax strategies so as not to overpay their taxes.
There is also the time savings. Whereas it can take an individual several hours to prepare their own return, it is a relatively simple task to complete your tax professional’s tax organizer and send him/her your tax documents.
The IRS reminds taxpayers to be careful when selecting a tax professional. Selecting the right tax professional is vitally important. Remember that taxpayers are ultimately responsible for the accuracy of their tax return, regardless of who prepares it.
How to Wisely Choose Your Tax Return Preparer
First and foremost, don’t begin your search by asking the question: “How much do you charge to prepare a tax return?” While the cost to prepare your tax return is an important consideration, it really is one of the least important considerations as you peruse the other considerations listed below.
Inquire about the preparer’s experience in preparing tax years. How many years? If you have a small business or rental property, does the preparer have experience preparing Schedule C and Schedule E?
Does the preparer use a tax organizer or checklist so as not to overlook tax deductions?
Does the tax professional merely prepare tax returns or will s/he look for tax savings strategies that can be implemented to reduce your taxes?
Ask how the preparer about the new Tax Cuts and Jobs Act. You want to make sure that the preparer is familiar with the new law and particularly about the Qualified Business Income deduction if you have a business.
Has the preparer written any books or articles about taxes? Spoken before any industry groups about taxes? This would indicate that the person is knowledgeable about taxes.
Look for a preparer who is available year-round. In the event questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over. Tax planning is ideally done months before the end of the calendar year to allow sufficient time for implementation.
Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on tax returns.
Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization or attends continuing education classes. Because tax law can be complex, competent tax preparers remain up-to-date on tax topics..
Check the preparer’s history. Check the Better Business Bureau website for information about the preparer. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.
Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or boast bigger refunds than their competition.
Make sure the preparer offers IRS e-file and ask to e-file the tax return.
You are signing your tax return under penalties of perjury. The preparer should be preparing your return based on your tax documents and not using national averages or fabricated numbers.
Never sign a blank or incomplete return. Work with preparers who provide you with a draft copy of your return for your review before it is e-filed. Make sure your preparer provides you with an opportunity to ask questions if something is not clear or appears inaccurate.
Any refund should go directly to you, the taxpayer, and not into the preparer’s bank account. If using direct deposit or ACH debit payments, review the routing and bank account numbers on the e-file authorization form against your bank information.
Make sure that the preparer provides you with a copy of your tax return.
Understand tax representation rules. Only attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation.
If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.
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About F. Bryan Haarlander, EA, CTRS:
Bryan Haarlander is an IRS licensed Enrolled Agent and who owns and operates a specialized tax services firm serving clients in the western suburbs of Philadelphia, PA, which includes the cities of Chester Springs, Coatesville, Collegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia, Phoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks, Chester, Delaware, Montgomery and Philadelphia Counties, as well as clients in Delaware, New Jersey, New York and throughout the continental USA.
A Certified Tax Resolution Specialist, Bryan is well-known for his IRS tax resolution expertise and his book How to Resolve Your IRS Tax Debt Problems.